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Comment by ttol | Hacker News Reader

I think Altucher was under the assumption that high-interest loans and other debt were already taken care of, since he was talking about investing in the market vs investing in yourself.

I don't think it's a bad idea to have an emergency fund of up to 6-8 months of living expenses, especially in this economy. Once that's taken care of, I don't agree that the capital left over should be put in the market vs in yourself. $20,000 is not a lot of capital, and taking classes, building a web site, marketing it, etc will quickly use that up, but the upside and benefits are much higher.

Even you said it yourself, at 2-3% realistic (and 20-30% at the highest level), investing in the market is not really worth it.

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$20000 is a lot of capital; I could probably live for a year on that, and I don't live in a cheap location. A young adult (low medical expenses, no children, no mortgage) living in a less-populated area (north pacific, midwest, south) could probably stretch that to two or even three years, if they find a decent deal on an apartment.

Classes at the local community college run about $50 per quarter, plus books. Building a website is free, and hosting it nearly so. Marketing doesn't have to mean full-page ads in the New York Times -- a few humble links on popular community sites can go a long way.

I think there's a certain group mentality on News.YC which builds up the idea of startups as hugely capital-intensive operations, requiring hundreds of thousands in capital and slick marketing campaigns across the web. This mentality is harmful. Every startup I've ever heard of has either 1) started small and built slowly or 2) flamed out in a hissing ball of comedy. There's no doubt thousands I've not heard of, which quietly curled up in a corner and died after spending all their investments on fancy chairs and television commercials.

If your objective is to stretch the $20K out over a long while through reducing your living expenses, I don't doubt you could make it last if clever enough.

However, if your objective is to turn that $20K into a much higher sum and gain much higher % returns (which I think Altucher was referring to), given the age range (20's), and the amount of capital, it makes sense to parlay that into knowledge and experience.

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